Corn Rises to 30-Month High as U.S. May Cut Inventory Estimate
Corn rose to a 30-month high in Chicago as the U.S. government may lower its stockpile estimate on increased demand from China and ethanol makers. Wheat gained after Egypt bought U.S. and Argentine grain.
A U.S. Department of Agriculture report due Feb. 9 will forecast corn inventories at 125.4 million metric tons on Sept. 1, down from a month-ago estimate of 127 million tons, according to a Bloomberg News survey. China may import a record 9 million tons of corn, the U.S. Grains Council said last week.
“The tight inventory situation, high demand from the ethanol-producing industry and a gloomier production outlook through Argentina, in our view, are supporting corn prices,” Carsten Fritsch, an analyst at Commerzbank AG in London, said in a report today.
Corn for March delivery advanced 3 cents, or 0.4 percent, to $6.815 a bushel at 1:14 p.m. London time on the Chicago Board of Trade. Prices reached $6.825, the highest level for a most- active contract since July 15, 2008. The grain is up 8.3 percent this year.
Chinese corn imports that met the council’s estimate would be more than double the record 4.3 million tons set in 1995. Demand is increasing after the Asian nation’s government sold grain from state warehouses to curb food prices.
Corn Inventories
“With increasing demand for corn from China and ethanol producers, supplies of the grain will be tightening this year,” said Han Sung Min, a broker at Korea Exchange Bank Futures Co. in Seoul. “This may drive the U.S. government to lower its forecast for global stockpiles further this week.”
Wheat for March delivery advanced 8.25 cents, or 1 percent, to $8.62 a bushel. The grain reached $8.7275, the highest level since August 2008, on Feb. 3. Milling wheat for March delivery traded on NYSE Liffe in Paris added 1 percent to 277.50 euros ($376.65) a ton.
Egypt, the world’s largest wheat importer, will raise its spending to buy the grain by 1.5 billion Egyptian pounds ($252 million), the Cairo-based Finance Ministry said Feb. 5. Also that day, the country purchased 170,000 tons of wheat.
Almost two weeks of protests across Egypt against President Hosni Mubarak left as many as 300 people dead, according to the United Nations. Elevated food prices contributed to the demonstrations. The ministry had already allotted an extra 1.3 billion pounds for commodity purchases.
Soybeans for March delivery gained 9.25 cents, or 0.6 percent, to $14.4275 a bushel in Chicago.
To contact the reporters on this story: Jae Hur in Tokyo at jhur1@bloomberg.net; Tony C. Dreibus in London at tdreibus@bloomberg.net.
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.
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